Magic Level

The higher your magic level is, the higher the damage/healing caused by spells or runes will be. Magic Level does not affect the damage caused by Rods and Wands.

To raise your magic level you have to cast spells and use mana. There is a spell, called Magic Shield, that makes damage taken by monsters (or possibly players if you play on a PvP-server) not reduce your Hit Points, but your Mana. Mana that is used in this way doesn't count towards your magic level.